Professional ethics and reporting division performance. Joshua Wilson is the controller of Apex Picture Frame Mouldings, a division of Garman Enterprises. As the division is preparing to count year-end inventory, Wilson is approached by Doug Leonard, the division’s president. A selection of inventory previously valued at $150,000 had been identified as flawed earlier that month and as a result was determined to be unfit for sale. Leonard tells Wilson that he has decided to count the selected items as regular inventory and that he will “deal with it when things settle down after the first of the year. After all,” Leonard adds, “the auditors don’t know good picture frame moulding from bad. We’ve had a rough year, and things are looking up for next year. Our division needs all the profits we can get this year. It’s just a matter of timing the write-off.” Leonard is Wilson’s direct supervisor.
1. Describe Wilson’s ethical dilemma.
2. What should Wilson do if Leonard gives him a direct order to include the inventory?
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